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Comment by somberi | Hacker News Reader

A book by Jeffrey Sachs, The End of Poverty, argues in favor of this approach where, wealthy individuals or nations help write off debt of poorer countries. The cost of servicing this debt is often crushing enough that no meaningful uplifit is possible from their current poverty.

https://en.wikipedia.org/wiki/The_End_of_Poverty

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Given these regimes often are unstable politically and/or corrupt, what prevents new debt being made and filling the pockets of the leaders?

In the Jeffrey Sachs model.

I'm personally of the opinion that anyone knowingly loaning money to corrupt or oppressive regimes is guilty of everything that regime does with that money, and the people can not be expected to repay that loan once they overthrow that regime. (That's not an issue in this particular case; fighting polio is obviously a very worthy cause.)

Of course when the voters knowingly elect corrupt leaders, it's on them. But unfortunately many countries lack a good free press that informs people about the corruption of their leaders. Or they lack a sufficient education for the people to hold their leaders accountable.

This is populist vision of corruption, which is fair.

However, I am familiar with a "reasonably corrupt" country, where deep hatred of the political class is radical, and I can tell you that the population is as much corrupted as the political class, just, in smaller scale.

I am also familiar with a "reasonably uncorrupted" country, where there isn't a radical hatred towards the political class, and interestingly, the population is significantly more orderly and civil than the former.

In this perspective, I'm very skeptical about the long-term advantages of money transfers when compared to social/infrastructural investments.

Reality is indeed a lot more complex than the simple black and white picture of my previous comment. I still think that for example the banks who loaned untenable loans to Greece should have taken that loss, rather than have Germany bail them out. In that case, the loans helped keep government mismanagement alive because they allowed the governments to pretend everything was fine. But there are also cases where providing those loans is still the lesser evil.

Still, I do want banks and other moneylenders to take more responsibility for who they're loaning money to, and what's being done with that money. And I think it's unfair to punish people for having lived under a bad government they had no control over. It seems attractive to combine those two goals.

But money spent on improving the lives of the people, through infrastructure, education and medicine, is (almost?) always money well-spent.

Fighting polio is worthy, but embezzling $26M while lying about fighting polio is not. That's the problem/risk.

Ultimately it's a question of default. Is default worth it or not? Do creditors agree that the new state deserves new loans after defaulting on predecessor's loans.

There could be problem when those leaders will try to spend all that money in more developed countries.

Lining the pockets of leaders and their friends is a cost-of-doing business in democracies. Yes, an economy would do better without that, but it very much does happen in all well-developed economies.

Reminds me of the thing my mother sometimes said, when complaining that terms in democracies are too short, leading to each government not being able to finish anything before having it undone by the next one. She quoted some historical figure from old times (Ancient Rome, I think?) - that a politician will always want to line the pockets of his and his friends (in the past it involved oppressing local population with taxes), but the amount of wealth lost to it is limited, and after that the politician will not care for money that much - so it's better to keep the politician for longer than to replace him, because the new one will start the pocket-lining process anew.

I can't find the exact quote now, unfortunately.

Lining the pockets of leaders

If you consider the most hated politician in the UK, Tony Bliar, he netted a personal fortune of estimated £20m. That’s a tiny fraction of what a dictator could amass in a far poorer country.

Tony Blair?

> it very much does happen in all well-developed economies.

This type of statement is a logical fallacy (I'd like to know if it's formalized, and if so, what's the name), and I think it's one of the most common: "There is X in any country".

Of course there is X in any country, but can be a radically different quantity and quality of X between two countries.

Is-ought fallacy with a bit of whataboutism?

A more correct title would be "Bill and Melinda Gates Are Paying Off Nigeria's Polio Related $76M Debt to Japan." So Bill Gates wants to eradicate polio and has been funding countries. In this Japan loaned it to Nigeria and Bill Gates paid it off.

Paying debts for third world countries (is this still politically correct?) is not efficient, might as well give it directly to their leaders--you save on fees. A corrupt to the core, third world country would issue even more debt to buy votes with projects (after taking a 20% "fee" for the leaders,) hire more of their supporters in state jobs etc etc.

Sounds like an argument against blindly paying off third-world debt. If we focus on paying off just appropriate, "non-corrupt" debt, we're good.

third world countries originally ment states not aligned with USA, Nazi Germany or USSR, during and after ww2. this actually included ireland.

Yeah, but that's not the meaning currently used since the end of the cold war.

I didn't say it was. But I do prefer a political meaning to the economic one.

Debt jubilees, old testament's version of bankruptcy, could save capitalism.

10 years ago, at university (management studies), our class could chose between reading this book, or a book written by a Coca-Cola CEO.

For me the choice was simple and I enjoyed learning about Jeffrey Sachs' ideas to end poverty. Somehow though, every other student read the Coca-Cola CEO's book. To this day, I am puzzled why people prefer reading about a guy that helps sell sugar water instead of an economist's solution to world poverty.

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